Voluntary Termination - PCP

GlasgowBear81

I have recently requested to VT a PCP as my circumstances changed.

At the point of request I had paid 50% of the total amount payable plus 1 instalment.

The car was collected and I have received a request to pay £737. £606 in "excess mileage" and the remainder for a small amount of damage.

I called them today and asked they waive the fees. I encountered additional miles over the last year as a result of a caring responsibility and the really minor damage was on the car when I bought it - a tiny ding and a scuff to a wheel.

They advised tough on the miles it's in the contract and any pre-existing damage I'd have to prove it was there when I bought it!

Their letter says my liability is limited to the amount required to settle the agreement and that if I don't pay it will result in my agreement being noted as terminated.

Isn't the latter exactly what I want? I paid 50%, looked after the car (full manufacturer history, inspector said when he arrived it looked mint - I'm an amateur car detailer) and then saying my liability is the settlement amount - this is incorrect as I have terminated rather than surrendered?

Advice appreciated.

BoGoF

Theres a differing opinion on excess mileage charges when VT'ing. Some argue as the contract is terminated the charges cant be applied. Others disagree and I believe the financial ombudsman has ruled in favour of the finance companies on a couple of occasions.

So to sum up....I'm not sure on the excess mileage.

fatbelly

The legal beagles guide has recently been updated

sheramber

If they terminate the agreement it is not voluntary termination and they may pursue you for any outstanding debt.
Does your agreement give any information as what happens if they terminate the agreement?

You want to voluntary terminate.

GlasgowBear81

It transpires I was never given a copy by the dealer and the copy I requested from the lender 3 weeks ago hasn't arrived.

On the phone they said if they terminate it my VT doesn't apply and they'll apply whatever the car sells for at auction minus costs and pursue me for the difference.

The GFV on the PCP in hindsight was a joke and even if I went to the end it wouldn't be worth it as such

Mgatti

I'm in the same situation as you, I am handing back my car on VT terms as I've paid 50% but getting mixed replies on wether the excess mileage has to be paid it's with VW finance can anyone make this clear?

almillar

can anyone make this clear?

Going by experience reading this forum only, customers have been expecting not to pay for the excess mileage when handing back. Sometimes it ends up in court, and some (a handful? Once?) times the Finance company wins and the customer has to pay. What was your mileage agreement, over how many years, what year are we at now, and how many miles have you done? If you've blatantly ignored a limit and gone way over, I would have to imagine it's worse for you.

AdrianC

almillar wrote: »

What was your mileage agreement, over how many years, what year are we at now, and how many miles have you done? If you've blatantly ignored a limit and gone way over, I would have to imagine it's worse for you.

£606 of excess mileage is going to be non-trivial. We'll be talking thousands rather than hundreds. 5,000 miles @ 12p/mile, f'rinstance.

sheslookinhot

When the agreement was taken out it was costed on the basis of an agreed mileage. If the expected mileage at the outset of the agreement was higher the cost model would have been different.

On that basis the car "owner" is entitled to seek an additional fee.

Why do people have the view they can break agreements ?

Mercdriver

sheslookinhot wrote: »

When the agreement was taken out it was costed on the basis of an agreed mileage. If the expected mileage at the outset of the agreement was higher the cost model would have been different.

On that basis the car "owner" is entitled to seek an additional fee.

Why do people have the view they can break agreements ?

Well one argument on here is that exercising the right to VT makes the contract null and void. It hasn't been tested in a qualifying court for precedent purposes, but many more finance houses are applying a charge. Mainly because I suspect too many people are using it for convenience and not out of hardship which was what it was designed for.

AdrianC

The VT is outside the contract - it's a statutory right.


The legislation itself is the Consumer Finance Act 1974.
https://www.legislation.gov.uk/ukpga/1974/39/section/99
https://www.legislation.gov.uk/ukpga/1974/39/section/100

s100 (4)If the debtor has contravened an obligation to take reasonable care of the goods or land, the amount arrived at under subsection (1) shall be increased by the sum required to recompense the creditor for that contravention, and subsection (2) shall have effect accordingly.

Damage above the industry standard BVRLA wear and tear guide is chargeable. Not many people argue with that interpretation. Mileage simply isn't mentioned either way. So the question is one of whether covering substantially in excess of the contracted mileage is falls outside "taking reasonable care".

Basic logic and common sense would lean towards that mileage being chargeable, don'cha think? And, since there's a pre-agreed excess mileage rate in the contract, you'd need a good excuse to argue for some other rate of recompense.